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Zenith 2016

Ig Nobel Prize Chinese Investment Threats Korean Economy

What is ‘Chinese Money’? THAAD Leads to ‘Anti-Korea’ in China
“Chinese Money” is a newly-coined term in Korea Since the so-called “eye of THAAD (Theater of
which refers to the capital that China invests all over High Altitude Area Defense missile)”, TPY-2 radar
the world, not considering the area of industry. can detect Chinese military information and strategy,
Recently, the inflow of Chinese Money in Korea Chinese have been protesting the deployment of
has been increasing exponentially. Chinese people are THAAD. Now that the deployment of THAAD
especially focusing their investment on the fields such in Korea has been decided, Chinese are stating
as IT (Information Technology), entertainment, stocks, negative positions about Korea. They are insisting on
bonds, and real estate. economic retaliation and using hashtags in their SNS
The reason why Chinese ODI (Overseas which has messages like “Boycott Korean products”

Direct Investment) increased is because China is and “Refuse visiting Korea”. This phenomenon sure
experiencing a slowdown in its economy. Chinese is influencing the economy of Korea.
considered investing overseas directly because they According to the research of Korea International
are in a state of such excessive economic boom that Trade Association, the export to China forms
there is a serious property bubble since few years ago. about 26% of all exports of Korea, and this means
People also expect devaluation of Chinese currency. its importance is tremendous. It is also rising
The next reason is that the Chinese government consistently, so we cannot ignore the effect of the
has deregulated overseas investment. Before the “Anti-Korea” campaign in China. In addition, if
relaxation of regulation, international financial Chinese refuse to do their tourism in Korea, we
institutions like central banks in overseas countries should expect untold losses since the proportion of
and the World Bank had to get approval from the Chinese tourists occupy 47% of all foreign tourists.
Chinese government to deal with Chinese banks in There are two different opinions about this
the bond market. Later, the authorities enabled foreign problem. One says that there would not be a big
central banks and international financial organization change unless Chinese consumers change their
to determine the scale of investment between Chinese preference for Korean cosmetics and entertainment.
banks by themselves. The other says that there will be silent restrictions in
The last reason can be explained by the advantages enterprise selection and in new investments. To cope
given to Chinese companies, like the enforcement of with the rapidly changing diplomatic situation and
a system in Korea which gives a five-year residence economic flow, we have to prepare long-term plans
visa to foreigners who invested a certain amount of and various countermeasures.
money on Korean real estate.
Park, Joomi (2-2) wnalwnal0127@naver.com

Photo References :
http://news.kmib.co.kr/article/view.asp?arcid=0922958054&code=11142200
https://jmagazine.joins.com/economist/view/306695
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